The accrued interest is compounded interest of 2.5% based on the amount withdrawn (lump sum and monthly mortgage payments) over the withdrawn period. The accrued interest goes back to the individual(s) CPF OA account. So actually, this helps to increase your CPF OA sum which eventually will be transferred to your retirement account. Personally to me, it is a good approach that the govt is helping us (the citizens) in our retirement. I did my sums before I sold my hdb and as such, I was about to return both the original sum plus accrued interest and have some positive cash returns as well.
